The conservation easement provides a practical, legally effective means for a private landowner to protect forever the significant features of a property, or a portion of a property, while retaining private ownership. By defining and removing particular rights from the ownership of a parcel of land, the conservation easement creates permanent safeguards against uses of the land that could damage or destroy its ecological, scenic, recreational, or resource values. Each conservation easement is written specifically to address the needs and desires of the owner, the natural characteristics of the land, and the conservation objectives of the owner and the protecting organization. Conservation easements are most often donated to conservancy organizations such as The Blue Mountain Land Trust, or to a governmental agency. The holder of a conservation easement agrees to protect the land' specified conservation values in perpetuity.
Property Rights and Conservation Easements
Every landowner is the holder of certain rights related to the use of land and its resources. Historically, some of these rights -- such as mineral and timber rights -- have been used, taxed, or transferred separately from the remaining ownership. Road, utility, and access easements also are examples of modifications of the rights of exclusive ownership. A conservation easement arises out of this principle of voluntarily separating and modifying certain elements of land ownership to preserve its conservation values.
A conservation easement is created by a landowner (the "grantor") who desires to transfer certain rights to a conservation organization ("the grantee"), under an agreement which prohibits the grantee's exercise of those rights. Working cooperatively, the landowner and the grantee identify appropriate uses for the land and detail activities which should be prohibited. For example, a landowner who wants to preserve productive farmland may transfer the right to use their property for residential development to the grantee. The grantee organization then holds that right, but is prohibited by the terms of the easement from ever using it, in effect extinguishing. Thus, it is assured that no future owner will have the right to use the property for a housing project. Conservation easements are perpetual, restricting certain uses regardless of who may own the land in the future.
Land subject to a conservation easement is still privately owned and managed. All rights of ownership which have not been specifically transferred to the grantee remain in the current owner. For example, a landowner may transfer the rights to develop a property for commercial, industrial, or multi-residential purposes while retaining rights to use the land for farming, harvesting of timber, recreation, or for residences for the owner's family.
Who accepts or holds conservation easements?
Under both Washington and Oregon law (RCW 64.04.130 and ORS 271.715(3)(b),, a conservation easement may be held by a non-profit nature conservancy corporation or by a federal, state, or local government. Blue Mountain Land Trust, which was incorporated by local residents in 1999, meets all of the qualifications of this Washington law as well as those imposed by federal law to qualify as a tax-exempt charitable institution under section 501(c)(3) of the Internal Revenue Code.
Does a conservation easement grant public access to land?
Public access is not required by Blue Mountain Land Trust as a condition of accepting a conservation easement. Usually the land continues to be farmed or otherwise used exclusively by the donor, with no public access. In some cases, if specified by the donors, the lands could be open for public recreation, or could serve as laboratories for public and private schools, and be open to scientists and researchers. There are many options depending on the wishes of the landowner and the characteristics of the land. The Land Trust visits each easement property annually as a part of its stewardship function.
Does a conservation easement restrict a landowner's ability to sell, develop, or bequeath land in the future?
Land protected by a conservation easement may be sold, bequeathed or otherwise transferred at any time. An easement may apply only to certain portions of a property, preserving open or wooded areas, for example, while permitting development of the remainder. Transfer of ownership will not affect the integrity or enforceability of the easement. Restrictions defined in the recorded conservation easement run with the title to the property, providing landowners an effective means of perpetuating their stewardship.
What are the financial benefits of donating a conservation easement?
Potential federal income tax benefits vary with each conservation easement. To qualify as a charitable gift, which may be deductible for federal income tax purposes, donation of development rights through a conservation easement must be granted in perpetuity to a qualified conservation organization such as Blue Mountain Land Trust . The value of the gift, determined by a formal appraisal, is the difference between the fair market value of the property before and after donation of the conservation easement . To be deductible, an easement must serve conservation purposes by preserving natural habitat, historic sites, scenic landscapes, wildlife corridors or connections to other protected parcels, areas for public education or recreation, or open spaces including productive farmland.
State and federal inheritance taxes on unrestricted land are often so high that heirs are forced to sell some or all of the land just to pay these taxes. Because a conservation easement reduces the market value of the property by reducing its development potential, inheritance taxes are also reduced. A conservation easement can enable heirs to retain property that would otherwise have to be sold.
When a gift of land is made to a family member or other person, it is subject to federal gift taxes if its value exceeds the maximum tax free amount. A reduction in the value of the property through a conservation easement may allow a landowner to give more land in any one year without creating a gift tax obligation, or it may help reduce the amount of gift tax owed.
We encourage you to consult your lawyer or tax planner for more information about property taxes.
Direct Financial Compensation:
If a landowner wishes to conserve his land for its scenic view, wildlife habitat, timber or agricultural production or other conservation values, the Land Trust can seek funding to purchase the conservation easement. This allows the landowner direct financial compensation for protecting the natural resource values of the property rather than subdividing and developing the property.
How are conservation easements enforced?
At the time a conservation easement is created, a baseline inventory of its conservation values is prepared to assist in future monitoring. Annual visits are arranged by the Land Trust in order to determine that the terms and conditions of the conservation easement are being honored.
If a violation is identified, the landowner is notified in accordance with procedures outlined in the easement. The easement also defines the process to be followed to resolve disputes regarding an alleged violation. If necessary, the Land Trust can take legal action to fulfill the conditions of the easement.
A Stewardship Fund is created in conjunction with the acceptance of each conservation easement. The Fund is used exclusively to cover future expenses of monitoring and enforcement of easement protections. The amount required for a stewardship fund is proportional to the duties required of the Land Trust under the terms of the conservation easement.